A Project Has a Payback Period of Five Years and the Firm

question 75

Multiple Choice

A project has a payback period of five years and the firm employs a 10 percent cost of capital.Which of the following statements is correct concerning this Project's discounted payback?

• A)discounted payback will exceed five years.
• B)discounted payback will be less than five years.
• C)discounted payback will decrease if the Project's IRR exceeds 10 percent.
• D)discounted payback will increase if the Project's IRR is less than 10 percent.

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Definitions:

Distinctive Values

Unique or characteristic beliefs and principles that guide behavior and decision-making within a culture, community, or individual.

Consumerism

A social and economic order that encourages the acquisition of goods and services in ever-increasing amounts.

Purchased Identity

A concept where individuals acquire their identity through the consumption and possession of material goods, indicating who they are and their social status.

Mall

A large enclosed shopping center with a variety of stores and services, typically featuring centralized walkways and food courts.